It seems that people or angels or some other entities were transformed into various animals for some misdeeds. I am not sure what really happened, but Ioryogi must have done something very evil to earn such a form :P

This anime continues to shine brightly! :D I just love Fumiko Orikasa and Houko Kuwashima’s voices in these roles :3 This episode was quite dense in events. They managed to introduce many characters, settle Kobato, and nicely portray a sidestory.